Paid content: Coming soon to your website?

Some industry observers believe content on the Internet will move in the same direction as content on television. Early in its history, television content was free; now, most of it is not. Internet content, goes the argument, will follow the same path.

Two recent events in the media world lend credence to that argument.
First The New York Times finally implemented its pay wall Monday. Second, Journalism Online, a company dedicated to helping publishers get paid for their online content, was acquired last week by printing giant R.R. Donnelley & Sons Co. (Financial terms of the deal were not disclosed).

“I think the religious debate over the pay issue is now over,” said L. Gordon Crovitz, one of the co-founders (along with Steven Brill and Leo Hindery) of Journalism Online. “The data are now in, and the data say publishers can have a paid model and keep all of their online advertising revenues—and keep all of their readers month-to-month and, over time, convert 5% to 10% of online visitors to pay for full access.”

At the center of Donnelley's acquisition is Press+, Journalism Online's technology that enables publishers to integrate a paid-content engine, which offers audiences a mix of free and subscription-based content, with their websites. Donnelley can provide extensive reach for the Press+ technology.
“For Donnelley, with its 60,000 customers—stretched from healthcare, to financial services, to real estate, to telecom—the Press+ digital pay system adds another buckle to its value chain,” wrote Ken Doctor, an analyst for Outsell Inc.

With its new pay wall, The New York Times is making its second attempt at charging for content online after abandoning its Times Select approach, which placed some content behind a pay wall, four years ago. With its new digital subscription plan, the Times is implementing a system similar to what Journalism Online has championed: a metered model that allows users free access up to a point.

After viewing 20 online editorial items within a four-week period, users will be asked to pay $15 to $25 per four-week period to access more stories, videos and slide shows. The price depends on the number of devices on which the user wants to access the Times.

Financial Times pioneered the metered model when it started charging heavy users of online content in 2007. An FT spokesperson said, “Last year, we experienced record growth in online subscribers, double-digital growth in online advertising and overall digital revenue grew by 47%.”

The metered model's attractiveness is that it doesn't cut into online traffic, allowing media brands to generate advertising revenue. At the same time, it also provides subscription revenue and the opportunity for higher CPM advertising aimed at highly engaged—that is, paid—users.

The question remains how much relevance this has for b-to-b media companies, which have traditionally relied on the controlled-circulation model, a euphemism for free content. In fact, at some b-to-b media companies the debate isn't about paid versus nonpaid, it's about going the extra step and asking users to register.